I believe that the idea is that you can't always do something on the spot.
For example, suppose I am developing a flashcard application that reads flashcards from a file and displays them in a pretty window. To accomplish this, I decide to write a couple of classes that do the actual file reading and parsing, etc., in order to keep that separate from the gui code.
So what happens if, for example, the gui asks one of those objects to open a non-existant file? An elegant way out of the problem is for the object to raise an exception. The gui can then choose to catch that, and pop up a dialog, or whatever.
It is definitely not the *only* way to solve the problem, though. You could also, for example, have every method return error codes. Or a hash containing an error code plus whatever other value it wants to return. Exceptions do provide a very clean way to do it, though.
Just my $.02,
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